Chapter 3 Hedging strategies using futures

[ABFRM]

on page number 44. in the solved example the index price of the S&P is given. Shud it be Futures price which we have to calculate there or there is a mistake? if we have to calculate futures price we they have to give risk free rate. Am i missing which i am not taking into consideration for calculating Number of Contracts to short?

thanks in advance David

 

[David Harper CFA FRM]

Hi Ahbishek,

You are correct. Sorry, the question needs to specify that the 1500 is futures price (not the current index price). We will revise this, as it is an important distinction, thanks for your careful attention, thanks!